How to Reform ObamaCare Starting Now

October 15, 2010

Until at least 2012, President Obama will veto any law repealing his signature health care legislation. What, then, can be done in the next two years? Look to the states, say Scott Gottlieb and Tom Miller, resident fellows at the American Enterprise Institute.

The most promising option is for governors to offer their own market-friendly versions of exchanges, establishing an alternative to ObamaCare and its one-size-fits-all health plans.

State-designed exchanges should allow any willing insurers already licensed in the state to offer plans.

Once inside the exchange, consumers would be guaranteed the ability to renew their coverage without regard to changes in their health status, so long as they remain continuously insured.

If individuals want to switch plans, they couldn't be hit with higher costs due to changes in health status.

Under this arrangement, there wouldn't be the incentive for gaming the system that exists under ObamaCare.

Of course, not everyone will be able to afford to purchase insurance in these exchanges, say Gottlieb and Miller.

Taxpayers can provide targeted subsidies through expanded high-risk pools to cap out-of-pocket, risk-based premium costs for the most vulnerable.

In the longer term, states could get waivers to "monetize" Medicaid medical benefits and allow these recipients to shop in the same exchanges.

Subsidies should flow directly to consumers, rather than to the health plans as ObamaCare requires.

Replacing the command-and-control features of ObamaCare with a plan offering consumers a real marketplace is a change many people can start to believe in, say Gottlieb and Miller.